Can A New Value Framework Help Ease Friction Over Orphan Drug Prices?

Sep 07, 2017

America’s healthcare debate has stalled in Congress, but constructive dialogue and innovation are thriving in specialized health forums. Even on the contentious topic of orphan drug pricing, the last few months have brought hopeful signs that patients, pharmaceutical companies, health insurers, and the academic bodies that counsel them are trying to speak the same language.

In May, the Institute for Clinical and Economic Review (ICER) released a whitepaper acknowledging that value assessments of orphan and ultra-orphan medicines are more challenging than for other types of treatments. This is partly due to distinctive clinical, regulatory, and payer contexts in which these treatments are developed or used, ICER conceded.

The whitepaper signaled that ICER was open to guidance from outside groups that have criticized its methodology in the past.  In particular, it showed a willingness to reflect the viewpoint of patients and manufacturers in its analysis of price, cost effectiveness, and affordability. This is important because the media, some payers, and even policymakers are looking to the organization, and others like it, to help determine good value for money in healthcare.

ICER’s intentions to be more flexible and nuanced in its analysis were also evident when it convened a multi-stakeholder summit on ultra-rare diseases at the end of May. In a full day of sessions, nurses, doctors, advocates and patients held frank discussions with payers, pharmaceutical executives, and health economics experts, including ICER leadership. In contrast to the divisive tone of healthcare debates in Washington, participants seemed determined to crack the pricing conundrum—or at least break down some ideological barriers—in an atmosphere of mutual respect.

This wasn’t just a sharing circle for recovering health economists. In July, ICER embedded key takeaways from its summit in an outline of proposed adaptations to its existing value framework to accommodate treatments for ultra-rare conditions, defined as affecting fewer than 10,000 individuals. In certain clearly-defined contexts, the new framework may encourage payers to cover new therapies, even if the clinical evidence supporting their use is incomplete.

The public has until September 25 to weigh in on the proposals, organized under four general themes:


·      In discussions of comparative effectiveness of ultra-orphan drugs, ICER will provide more context on how to interpret seeming deficits in clinical evidence. That context may include the fact that developers, and the FDA itself, are under pressure to speed up delivery of drugs for life-threatening conditions affecting children. In expedited studies, there may be a shortage of evidence on the durability of a drug’s effect or its long-term safety.

·      ICER will fine-tune its use and explanation of quality-adjusted life years (QALYs). When dealing with ultra-rare conditions, it will provide a broader range of cost-effectiveness threshold results, topping out at $500,000 per QALY. The revised language seems to be an acknowledgement that orphan drug costs scale differently than in other conditions. However, ICER will only assign value-based price benchmarks using the standard range up to $150,000 per QALY. As a result, the new language may not be sufficient to change decision-maker perceptions about what constitutes value for rare disease treatments.

·      Compared with earlier iterations of its rare-disease value framework, this version will encourage health insurers to take stock of a treatment’s positive impact on the patient’s family, school and community, including reduced caregiving needs.

·      ICER is working on a template that will help educate insurers and other decision-makers about research and development challenges relevant to the drug’s price. That might be inevitable costs incurred when working with minuscule, geographically scattered patient populations. While the template is under development, ICER will work with manufacturers to convey this information on a case-by-case basis.


ICER is one of several organizations in the U.S. promoting value frameworks as tools to scrutinize the pricing of new drugs. The American Society of Clinical Oncology (ASCO) provides such analytical aides to the cancer research community, as does the Drug Pricing Lab at Memorial Sloan Kettering Cancer Center (MSKCC), with a special focus on new cancer treatments.  ICER is unique, however, in that it reviews treatments across conditions instead of focusing on a particular disease state, as ASCO and MSKCC do.

The timing of these revisions is also critical. As ICER noted in its May whitepaper, worldwide revenues from orphan drugs topped $100 billion in 2015, and could double over the next five years, according to EvaluatePharma. That means the negative spotlight on pricing is unlikely to soften any time soon. The more ICER and its sister organizations clarify the context surrounding patient needs and developer challenges, the harder it may be for payers to impose arbitrary restrictions.

How should manufacturers respond to the framework revisions ICER proposed?

On the one hand, industry can applaud the process that led to these changes. Healthcare pricing (including list price, discounts, rebates) has been long been considered something of a black box—and ICER’s initial methodology was no different . Its early reviews offered little opportunity for stakeholder input and were marred by opaque calculations. This seems to be changing. At the rare disease summit and other events, the process has been thrown open to questions, debate, and feedback from all quarters, most importantly, patients and caregivers that help manage these debilitating conditions.

The public comment period on the new framework adaptation for rare diseases is also an opportunity for stakeholders to further query ICER’s data methodology, including its continued emphasis on QALYs, and on how we think about value, more broadly. How can we accurately quantify inputs from an infant who can’t speak? What is the merit of QALYs linked with immature survival data? And how can we  begin to pivot from a healthcare system that reimburses for chronic care delivery to one that supports and encourages curative therapies?

In the short term, the focus on “context” in ICER’s proposal provides a talking point for developers and manufacturers as they interact with other stakeholders. For example, companies can do much more to illuminate research challenges, beginning with briefings and laboratory tours for select members of the media. In the process, there may be an opportunity to help reporters understand the scope—and limits—of ICER’s public role.

The media should understand that, in an ideal world, ICER is one resource to catalyze discussions about pharmaceutical efficacy, costs, and social contexts that affect pricing and coverage decisions. ICER reviews are just one piece of intelligence to be considered as physicians work with patients to identify the best treatment option. The truth is, questions of treatment value can rarely be distilled to just a headline on an ICER press release. It’s important for reporters to view the underlying value analysis through the lens of individual patients and the impact therapies make on their day-to-day lives.

In the rare disease space, all of us must wrestle with the fact that paying for services rendered, as our system currently is structured, makes it difficult to value and price treatments that result in future cost avoidance. Perhaps future ICER forums can explore this disconnect in a more systematic and forward-looking fashion. Rather than a sunk cost, expenditures on the treatment of rare diseases must be re-envisioned as an investment toward a future dividend.

A value review is a carefully curated starting point for a conversation among stakeholders. If you read between the lines, the framework adaptions ICER published this summer inspire hope that the conversation will get smarter and more compassionate over time.

These views are the opinions of the author and do not represent the opinions of INC Research/inVentiv Health.

Leslie Isenegger is principal strategist for inVentiv Health Communications’ Reputation & Risk Management Practice, part of INC Research/inVentiv Health. Leslie helps healthcare clients manage high-profile issues as well as emerging threats, and develop messaging strategies around pricing and market access. Leslie has a background in health policy, working for the Centers for Medicare & Medicaid Services in the Public Affairs and Legislative Offices; she also served as chief speechwriter during the national roll-out of the Medicare Part D benefit. Prior to joining inVentiv, Leslie oversaw the Corporate Communications function at GNYHA Ventures, a family of healthcare companies serving more than 40,000 healthcare members.


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